Don't expect a big pay raise next year

Unless you are a high performer don’t expect much of a raise next year, according to the consulting firm Aon Hewitt; its annual salary increase survey of more than a 1000 companies, found that many businesses are planning to keep their raise budgets fairly flat next year, while shifting increased amounts of it toward performance-based pay.

What does this mean for the average employee?

Well in a nut shell, it simply means that only the top performers would see a significantly bigger pay check.

All this effectively questions whether variable pay budgets will remain strong in 2018, but the reality as the survey indicates is otherwise. With CEO’s growing concerns over political uncertainty, global competition and rising inflation, they are looking at new ways to differentiate pay, where a more individual performance metric and greater "stretch goals" could be something that is implemented more rigorously by the end of this year.

This is a strong indication of how companies are planning to manage fixed costs and a struggling economy with respects to pay. If they can get the best out of their top performers with no raise to base salaries (which would effectively weed out low achievers) then they could plan to “allot an average 12.5% of payroll toward incentive and bonus pay in 2018.”

Source LinkedIn #Bonuspay2018

In theory this is brilliant for businesses but could sit uncomfortably for some employees, especially when they realise that this only means they will need to work even harder if they want a piece of the pie: Employers know they don’t have to offer high wages to attract or retain the workers they want; especially now with a low unemployment rate.

It is reported that 15% of firms, plan to change their pay structure by setting more competitive targets. Companies have an even stronger focus on retaining their top workers in this ever-growing competitive market.

However, it leaves many employees now questioning their positions.

Do I change jobs now?

Is it time to shift my attitude?

Do I look to industries that are more aggressive in compensation?

Or do I choose an extremely successful company?

Whatever decision you make, CBSbutler have some of the best specialised recruiters who will help direct you and find that perfect fit. With the cost of living rising each year, pay is quickly becoming an even more important factor in accepting a new job, and employees want to see attainable compensation in their targets.

It is clear that in 2018 if you want a higher salary then you need to place yourself within a company where you are perceived to be a very strong contributor, with the hope that you will be able to get a bigger portion of the salary increase and bonus pie.